MarketPulse | Jul 28, 2016 06:17AM ET
The Japanese yen has posted slight losses on Thursday, as USD/JPY is currently trading at 104.70. On the release front, the US will release Unemployment Claims, with the indicator expected to rise to 261 thousand. Japan will release Retail Sales and Tokyo Core CPI, both key indicators. This will be followed by the highly-anticipated BoJ policy statement.
With the BoJ issuing a policy statement on Thursday, the bank’s monetary stance still remains unclear. Will it adopt further easing? There is strong pressure on the hesitant BoJ to take action, as the Japanese economy is struggling with weak growth and deflation.
The bank has rejected using helicopter money, leaving a cut in rates or an expansion of qualitative or quantitative easing. Any one of these moves could push the yen to lower levels. Meanwhile, the Abe government is planning a significant fiscal spending package, but how big is big?
On Wednesday, Abe announced a spending package of JPY 28 trillion, higher than the markets had expected. This report sent the yen lower. We can expect further volatility from USD/JPY as additional details about the fiscal package are released.
There were no dramatic moves by the Federal Reserve, which concluded its policy meeting on Wednesday. The bank continued to hold the course on interest rates, maintaining levels at 0.25% in a 9-1 vote.
The Fed statement sounded upbeat, saying that risks to the economy have receded and the employment market is getting tighter. The Fed added that it continues to monitor inflation levels and noted that the housing sector had improved. Will the Fed make a move and raise rates in September?
It appears that the Fed could go either way, and policymakers will make a decision at the September meeting based on the strength of US data. This means that key US numbers, such as Friday’s Advance GDP report, will be under the market microscope, and unexpected readings could lead to strong volatility in the currency markets.
USD/JPY Fundamentals
Thursday (July 28)
Upcoming Key Events
Friday (July 29)
*Key events are in bold
*All release times are EDT
USD/JPY for Thursday, July 28, 2016
USD/JPY July 28 at 5:50 EDT
Open: 104.91 High: 105.29 Low: 104.44 Close: 104.74
USD/JPY Technical
S3 | S2 | S1 | R1 | R2 | R3 |
101.20 | 102.36 | 103.73 | 104.99 | 105.87 | 106.81 |
Further levels in both directions:
OANDA’s Open Positions Ratio
The USD/JPY ratio is showing little movement on Thursday, consistent with the lack of movement from USD/JPY. Currently, long positions have a majority (65%), indicative of trader bias towards USD/JPY breaking out and moving to higher ground.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.